June 14, 2016

In a claim for misuse of confidential information brought by a group of insurance companies against several ex-employees and a competitor, the High Court has granted an application for an interim order allowing the defendants’ electronic devices and databases to be searched and for the destruction of any confidential material of the claimants found on them.

In a judgment that has only recently become available, the court considered that the risk of injustice if the injunction were refused sufficiently outweighed the risk of injustice if it were granted, particularly where the defendants had admitted some misuse of the claimants’ confidential information and the evidence showed a high degree of subterfuge in their use of that information.

Following an earlier order, the defendants had disclosed about 4,000 documents from which it became apparent that the use of the claimants’ confidential information was more extensive and involved more individuals.  The claimants made a further application for more extensive relief, specifically requiring the defendants to give access to their computer systems and devices and for the deletion of any confidential information of the claimants found on them and any documents derived from that information.

Granting the order, Slade J observed that while it was not the role of the court on an interim injunction to decide whether the claim was made out, she felt, on the material before her, a high degree of assurance that the claimants would establish that the defendants had taken and used their confidential information.  In their draft defence, the defendants had admitted to taking and misusing confidential information of the claimants, even if the extent to which they had done so was a matter for trial.  Further, whilst the defendants had disclosed a large number of documents and complied with previous interim orders, their behaviour as admitted and on the evidence showed a high degree of subterfuge in the use of the claimants’ confidential material.  On the evidence before her, the judge was not satisfied that the defendants could be trusted to seek out and delete such material themselves, were they to retain it whether deliberately or inadvertently.

Applying the American Cyanamid principles, the judge was also satisfied that the claimants had shown a strong case that their claim would succeed at trial and that they would obtain the relief claimed, which included the destruction of material, that damages would be an inadequate remedy were interim relief not to be granted, and that the claimants would be able to meet their cross-undertakings in damages.

In Slade J’s view, the balance of convenience favoured granting interim relief for the delivery up of the defendants’ devices and computers, their imaging, a search for confidential information and material using such information, and its destruction.

The order would be made, however, subject to safeguards designed to eliminate the risk that the defendants’ confidential information might be accessed by the claimants.  First, and as agreed, the defendants’ devices and computers would be searched by an external computer expert appointed by the defendants using certain search terms to be agreed between the parties.  Material that the expert considered to be within the scope of the order would be deleted from the defendants’ devices, although the information would be preserved on a copy kept by the computer expert.  Any material identified by the expert which the defendants did not agree fell within the scope could be referred to the court or other agreed arbitrator for decision (Arthur J Gallagher Services (UK) Ltd v Alexandre Skriptchenko [2016] EWHC 603 (QB) (11 February 2016) – the judgment is available on the Lawtel  subscription service website).